Previous articleNext article FreeForum: 25th Anniversary of Welfare ReformIntroductionLaura KawanoLaura KawanoForum Editor Search for more articles by this author Full TextPDF Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreTwenty-five years ago, the structure of the social safety net in the United States was fundamentally changed. The federal Aid to Families with Dependent Children (AFDC) entitlement program was replaced with Temporary Assistance for Needy Families (TANF) — a block grant allocated to states and other subfederal regions. The new legislation introduced mandated work requirements and limited how long families could receive benefits, while giving states much discretion over how to spend funds. Around the same time, the Earned Income Tax Credit was enhanced to further support work among low-income families, and Medicaid was expanded to provide health insurance to children in low-income families. By prioritizing personal responsibility and work, advocates promised that these new policies would propel low-income families into self-sufficiency. However, concerns remained over whether states would adequately prepare cash assistance recipients to find work and how families would fare when they permanently lost access to benefits.The goal of these policies was to revamp the safety net in ways that would translate into long-run improvements for American families. On its 25th anniversary, this Forum presents three papers that examine how families have fared over this period. This long-run perspective is particularly useful, as these reforms were introduced during one of the longest economic expansions on record, making it difficult to disentangle their early effects from the strength of the underlying economy. The more recent US economic experience can help shed light on the longer-lasting effects of these policies during weaker economic times like the Great Recession and the more recent Pandemic Recession.The first paper by LaDonna Pavetti, Ali Safawi, and Danilo Trisi documents the contraction of the cash transfer system since the introduction of TANF, with particular attention to how these trends varied by geography and racial groups. They examine the role that the weakening of our cash assistance system has played in the increase of the number of families living in deep poverty and offer several recommendations for improving the program. The next two papers consider the effects of the bundle of policy changes that occurred and provide evidence that, on net, they did not lead to persistent disadvantages for those affected. The paper by Jeehoon Han, Bruce Meyer, and James Sullivan shows that along with the shift away from cash transfers documented in the first paper, tax and in-kind transfers increased. Focusing on single-mother-headed families, the main group targeted by these policies, they find that incomes for those in the bottom decile fell, but argue that this is due to an increase in the underreporting of income in surveys. Instead, when looking at measures of consumption, the material well-being of the worst off improved faster than for those higher up the consumption distribution. The final paper by Jacob Bastian, Luorao Bian, and Jeffrey Grogger shifts our attention to those who were adolescents at the time of safety-net reform and estimates its effects on their outcomes as young adults. They find that while women’s labor supply increased between the ages of 18 and 22, these gains did not persist into later ages, although it is difficult to separate the longer-run effects of safety-net reform from that of the Great Recession. Marriage rates among women fell, but there were no significant changes in childbearing, either out of wedlock or in total. While these latter two papers find some improvements for low-income families, they by no means imply that they are now well off.Today, proposals on both the political left and right make lifting children out of poverty a central goal. Analyses of the long-run effects of our most recent experience of sweeping safety-net reform hold important lessons for evaluating the potential paths that we might take. This Forum adds to the growing body of evidence on these effects. Previous articleNext article DetailsFiguresReferencesCited by National Tax Journal Volume 74, Number 3September 2021 Published for: The National Tax Association Article DOIhttps://doi.org/10.1086/716432 Views: 139 HistoryPublished online August 31, 2021 © 2021 National Tax Association. All rights reserved. Crossref reports no articles citing this article.
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